1. In an exemption case, all real and personal property in Kansas shall be subject to taxation
unless expressly exempted. K.S.A. 79-101. Thus, taxation is the rule and exemption from
taxation is the exception under the Kansas Constitution and statutes.

2. The burden of establishing an exemption from taxation is on the party requesting the
exemption.

3. Constitutional and statutory provisions exempting property from taxation are strictly
construed against the party claiming the exemption.

4. The fundamental rule of statutory construction is that the intent of the legislature governs
if that intent can be ascertained. The legislature is presumed to have expressed its intent
through the language of the statutory scheme. Ordinary words are given their ordinary
meanings. When a statute is plain and unambiguous, the court must give effect to the
intention of the legislature as expressed, rather than determine what the law should or
should not be.

5. K.S.A. 79-201b Fourth, which specifically deals with tax exemptions for low
income
housing, is the applicable statute when a taxpayer requests a statutory tax exemption for
property that is primarily low income housing.

6. A taxpayer requesting a statutory tax exemption for property that is primarily low income
housing must meet the requirements of K.S.A. 79-201b Fourth. Failure to meet those
requirements results in the denial of the requested statutory tax exemption.

7. In order for a taxpayer to prove that property fits within the charitable purposes tax
exemption of Article 11, §1(b)(2) of the Kansas Constitution, the taxpayer must show (1)
that the services provided are free of charge or so nearly free of charge as to make the
charges nominal or negligible and (2) that the services are rendered to those who are
unable to provide themselves with what the institution provides for them.

GREEN, J.: Inter-Faith Villa, L.P. (Inter-Faith Villa), and Inter-Faith Development
Corporation (IFDC) (collectively appellants) appeal from an order of the State Board of Tax
Appeals (BOTA) denying their applications for exemption from ad valorem taxes on two parcels
of real estate identified as Villa Central and Villa North in Sedgwick County. The appellants argue
that BOTA erroneously interpreted and applied the law pertaining to their applications when it
determined that K.S.A. 79-201 Ninth and Article 11, § 1(b) of the Kansas
Constitution did not
apply to allow an exemption for the subject properties. Moreover, the appellants maintain that
BOTA erroneously based its decision on determinations of fact that were unsupported by the
evidence and that its order was otherwise unreasonable, arbitrary, or capricious.

We determine that because the subject properties in this case were primarily low income
housing facilities, K.S.A. 79-201b Fourth is the applicable exemption statute here.
Nevertheless,
based on the plain meaning of K.S.A. 79-201b Fourth and the strict construction that
must be
given to exemption statutes, the appellants were not entitled to a statutory tax exemption due to
their failure to meet the requirements of K.S.A. 79-201b Fourth. Moreover, the
appellants do not
fit within the charitable purposes exemption under Article 11, § 1(b)(2) of the Kansas
Constitution because they have failed to show that the services they provided were "free of
charge" or so "nearly free of charge as to make the charges nominal or negligible." See
Lutheran
Home, Inc. v. Board of County Commissioners, 211 Kan. 270, 278, 505 P.2d 1118 (1973).
Accordingly, we affirm BOTA's decision.

Inter-Faith Villa owns and operates Villa Central in Sedgwick County. Villa Central
contains 37 housing units, two office areas, a community room, a kitchen, and a laundry room for
the residents. Eight of Villa Central's housing units are for homeless people with chronic mental
disabilities. The remaining 29 housing units are for people who need affordable housing. The rent
is $400 for a one-bedroom apartment and $475 for a two-bedroom apartment, with utilities
included. Community building activities at Villa Central take place in the on-site community room
and include resident social events, life skills classes, community meals, and resident association
meetings.

Inter-Faith Ministries Wichita, Inc. (IFM), a tax-exempt Kansas not-for-profit corporation,
is the general partner of Inter-Faith Villa. IFM controls the operations of Villa Central. The
limited partner is NDC Corporate Equity Fund IV, L.P., a Delaware limited partnership, that
assisted in providing some of the financing for the acquisition and construction of Villa Central in
exchange for low income housing tax credits. The units are rented at $370 for an efficiency
apartment, $444 for a one-bedroom apartment, and $495 for a one-bedroom loft apartment, with
all utilities included.

Other funding for Villa Central comes from the U.S. Department of Housing and Urban
Development (HUD) Supportive Housing Program, 42 U.S.C. § 11381 (2000) et
seq., and the
HOME Investment Partnership Program (HOME), 42 U.S.C. § 12721 (2000) et
seq., a
construction loan from a commercial bank that holds a mortgage on the property, and rental
income. All of Villa Central is actually and regularly used exclusively for cooperative housing for
people with disabilities or people having a limited or low income, as provided under the HUD
Supportive Housing Program.

IFDC owns and operates Villa North in Sedgwick County. Villa North contains 19
housing units for homeless people with chronic mental disabilities or alcohol or drug disabilities.
An additional five housing units are for people who desire to live in the community, such as
property management staff, security officers, or full-time volunteers, but who do not require
supportive services. Nevertheless, these five units have been used only for low income housing
since Villa North opened. Villa North is funded by grants from the HUD Supportive Housing
Program, by individual and corporate contributions, by HOME funds administered by the City of
Wichita, and by rental payments. Housing assisted with HOME funding must meet the
affordability requirements as set forth in federal regulations.

Most of the residents at both Villa Central and Villa North receive Section 8 low income
vouchers, see 42 U.S.C. § 1404a (2000) et seq., to assist in paying the rent.
Residents pay rent for
the apartments in accordance with low-income housing tax credits and HOME rent and income
guidelines. When a resident is unable to pay the rent, a case manager will help the resident with
financial planning and will also help the resident access community services that might assist in the
payment of rent. If the resident is still unable to pay the rent, then the resident will be referred to
an appropriate agency for help in housing or transferred to one of their temporary shelters. The
record indicates that an individual was guaranteed only a 1-week stay at IFM's temporary shelter.

At both Villa Central and Villa North, supportive services are individually tailored to meet
the needs of all residents. The supportive services are provided by a case manager who maintains
a weekly service provider mainstream information listing to ensure that all residents receive the
highest quality and most efficient services available. At a weekly meeting with each resident, the
case manager reviews the services applied for and ensures that the services have or will be
received. Some of the supportive services include referring residents to other social agencies,
referring residents to mental health professionals, finding a trustee to help a resident with his or
her finances, assisting residents in obtaining employment, helping a resident with financial
planning, providing volunteers through IFM to visit residents and help them with activities of daily
living, making residents aware of the eligibility requirements for various social services programs,
and transporting residents to services through IFM's transportation program. Community building
activities are planned for all residents at Villa Central and Villa North with the goal of creating an
inclusive community that is respectful of all people. The office areas at both facilities are used for
case management and community building activity planning.

In May 2004, Inter-Faith Villa filed its initial application for exemption from ad valorem
tax on Villa Central. The exemption was requested under K.S.A. 79-201b Fourth
from June 2001
forward. IFDC also filed an application for exemption from ad valorem tax on Villa North. The
exemption was requested under K.S.A. 79-201b Fourth from July 2003 forward. The
Sedgwick
County Appraiser's office did not request a hearing on the applications and recommended that
both exemptions be granted.

BOTA determined that Inter-Faith Villa did not satisfy the financing requirement of
K.S.A. 79-201b Fourth and denied the application for exemption for Villa Central.
Inter-Faith
Villa filed a petition for reconsideration, which was granted by BOTA. In addition, both
Inter-Faith Villa and IFDC amended their applications to add K.S.A. 79-201 Ninth as
an alternative
basis for exemption. The Sedgwick County Appraiser's office again recommended that the
exemptions be granted.

In June 2006, BOTA held a hearing on both applications for tax exemption. At the
hearing, BOTA's chairperson noted that the appellants had cited Article 11, §1(b) of the
Kansas
Constitution, the constitutional provision relating to exemption from ad valorem taxation, and
asked if there was any authority for the requested exemption to be granted under that
constitutional provision. The appellants' attorney requested time to brief that issue. The appellants
filed a supplemental brief in which they argued that their applications for exemption fit within
Article 11, §1(b) and that this constitutional provision provided an independent basis for an
exemption for the subject properties.

In November 2006, BOTA issued its order on reconsideration denying Inter-Faith Villa's
application for exemption of Villa Central. Finding that Villa Central was not "used exclusively"
for an exempt purpose, BOTA denied the request for exemption under Article 11, §1(b) of
the
Kansas Constitution. Moreover, BOTA determined that the applicable exemption statute was
K.S.A. 79-201b Fourth, which specifically addressed low income housing, instead of
K.S.A. 79-201 Ninth, which was the more general exemption statute dealing with
property used for
providing humanitarian services. Finally, the Board determined that because Inter-Faith Villa did
not receive its financing from the federal programs identified in K.S.A. 79-201b
Fourth, it was not
entitled to an exemption under that statute.

On the same date, BOTA also issued its order denying IFDC's application for exemption
for Villa North. BOTA based its decision on the same grounds as those it used to deny Inter-Faith
Villa's application for exemption of Villa Central. IFDC filed a petition for reconsideration of
BOTA's decision. In a written order, BOTA denied IFDC's petition for reconsideration.

Standards of Review

This court's standard of review of an order of BOTA is governed by K.S.A. 77-621, which
states:

"(c) The court shall grant relief only if it determines any one or more of the
following:

(1) The agency action, or the statute or rule and regulation on which the
agency
action is based, is unconstitutional on its face or as applied.

(2) the agency has acted beyond the jurisdiction conferred by any provision of
law;

(3) the agency has not decided an issue requiring resolution;

(4) the agency has erroneously interpreted or applied the law;

(5) the agency has engaged in an unlawful procedure or has failed to follow
prescribed procedure;

(6) the persons taking the agency action were improperly constituted as a
decision-making body or subject to disqualification;

(7) the agency action is based on a determination of fact, made or implied by
the
agency, that is not supported by evidence that is substantial when viewed in light of the record as
a whole, which includes the agency record for judicial review, supplemented by any additional
evidence received by the court under this act; or

In an exemption case, we bear in mind that all real and personal property in Kansas shall
be subject to taxation unless expressly exempted. See K.S.A. 79-101. Thus, taxation is the rule
and exemption from taxation is the exception under the Kansas Constitution and statutes. Any
doubts are to be resolved against the exemption and in favor of taxation. The burden of
establishing an exemption from taxation is on the party requesting it. In re Tax Exemption
Application of Johnson County Housing Coalition, Inc., 29 Kan. App. 2d 322, 325-26, 26
P.3d
1279, rev. denied 272 Kan. 1418 (2001). Constitutional and statutory provisions
exempting
property from taxation are strictly construed against the party claiming the exemption.
Nevertheless, strict construction does not warrant unreasonable construction. In re Tax
Application of Lietz Constr. Co., 273 Kan. 890, 904-05, 47 P.3d 1275 (2002).

When reviewing BOTA's interpretation of a tax exemption statute, we apply the following
standards:

"'The interpretation of a statute by an administrative agency charged with the
responsibility of enforcing a statute is entitled to judicial deference and is called the doctrine of
operative construction. Deference to an agency's interpretation is particularly appropriate when
the agency is one of special competence and experience. Although an appellate court gives
deference to the agency's interpretation of a statute, the final construction of a statute lies with the
appellate court, and the agency's interpretation, while persuasive, is not binding on the court.
Interpretation of a statute is a question of law over which an appellate court's review is unlimited.
[Citation omitted.]'" Johnson County Housing Coalition, 29 Kan. App. 2d at 324
(quoting In re
Appeal of United Teleservices, Inc., 267 Kan. 570, 572, 983 P.2d 250 [1999]).

Finally, the fundamental rule of statutory construction is that the intent of the legislature
governs if that intent can be ascertained. The legislature is presumed to have expressed its intent
through the language of the statutory scheme. Ordinary words are given their ordinary meanings.
When a statute is plain and unambiguous, the court must give effect to the intention of the
legislature as expressed, rather than determine what the law should or should not be.
Winnebago
Tribe of Nebraska v. Kline, 283 Kan. 64, 77, 150 P.3d 892 (2007).

I. Did BOTA erroneously interpret and apply K.S.A. 79-201 Fourth as the only
applicable
exemption statute to the appellants?

First, the appellants argue that BOTA erroneously interpreted and applied the law
concerning their applications for tax exemption by focusing on K.S.A. 79-201b
Fourth, the
housing exemption, as the only applicable exemption statute.

In reviewing BOTA's decision, we point out that BOTA is a specialized agency that exists
to decide taxation issues and is considered to be the paramount taxing authority in Kansas.
BOTA's decisions are given great weight and deference when it is acting in its area of expertise.
The party challenging BOTA's decisions has the burden to prove that the action was erroneous.
Nevertheless, if BOTA's interpretation of law is erroneous as a matter of law, an appellate court
will take corrective steps. In re Tax Appeal of Western Resources, Inc., 281 Kan.
572, 575, 132
P.3d 950 (2006).

"All real property and tangible personal property, actually and regularly used
exclusively
for housing for elderly and handicapped persons having a limited or lower income, or used
exclusively for cooperative housing for persons having a limited or low income, assistance for the
financing of which was received under 12 U.S.C.A. 1701 et seq., or under 42
U.S.C.A. 1437 et
seq., which is operated by a corporation organized not for profit under the laws of the state
of
Kansas or by a corporation organized not for profit under the laws of another state and duly
admitted to engage in business in this state as a foreign, not-for-profit corporation; and all
intangible property including moneys, notes and other evidences of debt, and the income
therefrom, belonging exclusively to such a corporation and used exclusively for the purposes of
such housing. For the purposes of this subsection, cooperative housing shall mean those
not-for-profit cooperative housing projects operating pursuant to sections 236 or 221(d)(3), or
both, of
the national housing act and which have been approved as a cooperative housing project pursuant
to applicable federal housing administration and U.S. Department of Housing and Urban
Development statutes, and rules and regulations, during such time as the use of such properties
are restricted pursuant to such act, statutes or rules and regulations."

K.S.A. 79-201b Fourth was amended in 2004 to expand the definition of
cooperative housing in
the last part of the statute. L. 2004, ch. 173, sec. 6. This amendment did not change the financing
requirement ("assistance for the financing of which was received under 12 U.S.C.A. 1701 et
seq.,
or under 42 U.S.C.A. 1437 et seq.") of the statute.

Here, the subject properties were not used exclusively as housing for elderly and
handicapped persons having a limited or lower income. Moreover, the properties were not used
exclusively for cooperative housing as defined in K.S.A. 79-201b Fourth. The Board
properly
found that the appellants received financing assistance from two federal programs that were not
codified in the particular sections cited by K.S.A. 79-201b Fourth. BOTA recognized
that
although the federal statutes had been amended to provide additional programs, the Kansas
exemption statutes had not been amended to provide an exemption for organizations that receive
financial assistance from the new federal programs. Accordingly, BOTA properly denied the
appellants' requested exemptions under K.S.A. 79-201b Fourth.

In their appellate brief, the appellants fail to dispute BOTA's finding that they do not meet
the requirements under the plain language of K.S.A. 79-201b Fourth. Instead, the
appellants'
arguments relate to BOTA's denial of exemptions under K.S.A. 79-201 Ninth and the
Kansas
Constitution. As a result, the appellants have abandoned any argument that they fit within the
requirements of K.S.A. 79-201b Fourth. See Lee Builders, Inc. v. Farm Bureau
Mut. Ins. Co.,
281 Kan. 844, 859, 137 P.3d 486 (2006) (An issue not briefed by an appellant is deemed waived
or abandoned.).

B. Statutory Tax Exemption for Humanitarian Services

The appellants first maintain that their subject properties fall within the humanitarian
services exemption of K.S.A. 79-201 Ninth. K.S.A. 79-201 Ninth states:

"All real property and tangible personal property actually and regularly used by a
community service organization for the predominant purpose of providing humanitarian services,
which is owned and operated by a corporation organized not for profit under the laws of the state
of Kansas or by a corporation organized not for profit under the laws of another state and duly
admitted to engage in business in this state as a foreign not-for-profit corporation if: (a) The
directors of such corporation serve without pay for such services; (b) the corporation is operated
in a manner which does not result in the accrual of distributable profits, realization of private
gain resulting from the payment of compensation in excess of a reasonable allowance for salary
or other compensation for services rendered or the realization of any other form of private gain;
(c) no officer, director or member of such corporation has any pecuniary interest in the property
for which exemption is claimed; (d) the corporation is organized for the purpose of providing
humanitarian services; (e) the actual use of property for which an exemption is claimed must be
substantially and predominantly related to the purpose of providing humanitarian services, except
that, the use of such property for a nonexempt purpose which is minimal in scope and
insubstantial in nature shall not result in the loss of exemption if such use is incidental to the
purpose of providing humanitarian services by the corporation; (f) the corporation is exempt from
federal income taxation pursuant to section 501(c)(3) of the internal revenue code of 1986 and;
(g) contributions to the corporation are deductible under the Kansas income tax act. As used in
this clause, 'humanitarian services' means the conduct of activities which substantially and
predominantly meet a demonstrated community need and which improve the physical, mental,
social, cultural or spiritual welfare of others or the relief, comfort or assistance of persons in
distress or any combination thereof including but not limited to health and recreation services,
child care, individual and family counseling, employment and training programs for handicapped
persons and meals or feeding programs."

K.S.A. 79-201b Fourth is the more specific statute dealing with exemptions of
low income
housing while K.S.A. 79-201 Ninth is a more general statute that pertains to property
used for the
predominant purpose of providing humanitarian services. Johnson County Housing
Coalition, 29
Kan. App. 2d at 326. "General and special statutes should be read together and harmonized
whenever possible. To the extent a conflict exists, the special statute will prevail unless it appears
that the legislature intended to make the general statute controlling." [Citation omitted.]
Alliance
Mortgage Co. v. Pastine, 281 Kan. 1266, 1274, 136 P.3d 457 (2006).

Citing Johnson County Housing Coalition, Inc., 29 Kan. App. 2d 322, BOTA
found that
K.S.A. 79-201 Ninth was inapplicable to this case. In Johnson County Housing
Coalition, the
appellant was a nonprofit community housing development organization that applied for a tax
exemption on its 40-unit apartment complex used predominately as low income housing, housing
for the disabled, and housing for handicapped persons. Thirty-five of the units were rented to low
income households. BOTA determined that 79-201b Fourth controlled over 79-201
Ninth
because 79-201b Fourth was the more specific statute addressing real property.
BOTA further
determined that because the appellant had not demonstrated that it had met the requirements of
79-201b Fourth, it was not entitled to the exemption under that statute.

On appeal, the appellant in Johnson County Housing Coalition conceded that
its property
did not fall within the exemption under K.S.A. 2000 Supp. 79-201b Fourth.
Nevertheless, the
appellant argued that BOTA erred in determining that K.S.A. 2000 Supp. 79-201b Fourth
applied
and asserted that K.S.A. 2000 Supp. 79-201 Ninth was the applicable statute. This
court
disagreed with the appellant's argument and stated:

"If K.S.A. 2000 Supp. 79-201 Ninth controlled, there would be
virtually no purpose for
any section of K.S.A. 2000 Supp. 79-201b. All exemptions listed in K.S.A. 2000 Supp. 79-201b
can necessarily be classified as humanitarian activities. When a conflict exists between a statute
dealing generally with a subject and another statute dealing specifically with a certain phase of it,
the specific statute controls unless the legislature intended to make the general act controlling.
In
re L.D.B., 22 Kan. App. 2d 821, 824-25, 924 P.2d 642 (1996). K.S.A. 2000 Supp. 79-201
Ninth
deals generally with providing humanitarian services while K.S.A. 2000 Supp. 79-201b
Fourth
refers specifically to low income residential housing." 29 Kan. App. 2d at 326.

This court noted that legislative history made it clear that the legislature did not intend K.S.A.
2000 Supp. 79-201 Ninth to control over K.S.A. 2000 Supp. 79-201b
Fourth in cases involving
residential housing facilities. Instead, K.S.A. 2000 Supp. 79-201 Ninth had been
adopted largely
in response to a BOTA decision that required the subject property to be used "exclusively" for
charitable, educational, scientific, or religious purposes. 36 Kan. App. 2d at 326.

Concluding that K.S.A. 2000 Supp. 79-201b Fourth was the more specific
statute
applicable to the facts of the case, this court in Johnson County Housing Coalition
stated:

"As evidenced by case law and the plain reading of the statute, K.S.A. 2000 Supp.
79-201 Ninth was not designed to govern residential housing facilities. The
nonexclusive list of
activities classified as 'humanitarian services' in the statute include health and recreation
services, child care, counseling, employment and training programs for handicapped persons,
and meals or feeding programs. Existing case law applying this subsection reinforces this
position. [Citations omitted.]

The appellants attempt to distinguish the instant case from Johnson County Housing
Coalition by pointing out that the subject properties in this case are not just residential
housing
complexes. Instead, the appellants maintain that the residents in the subject properties are
provided with supportive services to help solve the chronic homeless problem. The appellants
contend that the predominant purpose of the subject properties is for humanitarian services that
includes housing and, therefore, the properties fit within K.S.A. 79-201 Ninth.

Initially, in denying the appellants the exemptions under K.S.A. 79-201 Ninth,
BOTA
found that although the appellants provided services, such as a medical clinic and meals program,
those services were not being conducted from the subject properties but from neighboring
properties. In its later order denying IFDC's petition for reconsideration, BOTA recognized that
support services and case management services were being provided at the subject properties.
Nevertheless, BOTA found that the primary use of the subject properties was for residential
services and not humanitarian services. As a result, K.S.A. 79-201b Fourth was the
applicable
exemption statute here.

The record establishes that both properties in this case were predominantly low income
residential apartment complexes. Significantly, in both their initial and amended additions to their
applications for exemption under K.S.A. 79-201b, Inter-Faith Villa acknowledged that the
predominant use of their properties was for low income housing.

Although the appellants point out that they provided supportive services that included
referring residents to appropriate medical providers for chronic diseases or drug and alcohol
abuse, scheduling support groups, helping residents get job training, and helping residents find
employment, these services were secondary to the appellants' main purpose in providing low
income housing. This is highlighted by the fact that the appellants would transfer their residents to
a homeless shelter or refer them to another appropriate agency for help in housing when the
residents were unable to pay their rent.

Moreover, the evidence in the record established that the funding for the subject
properties was predominantly tied to providing low income housing. The funding under the
HOME program required that the housing comply with the federal regulations for affordability
requirements. The receipt of low-income tax credits required that all of the Villa Central units be
leased to individuals or families whose income was 60% or less of the area median gross income
and that a minimum of 20% of the apartments be leased to individuals whose income was 50% or
less than the area median income. HUD provided grants that restricted their use to supportive
housing. In addition, the amount of money received from the residents of the subject properties
and the Section 8 reimbursement funds was based on the housing provided to the residents. Based
on the record, the low income housing was the predominant service provided to the residents,
with the other services being incidental to providing housing.

K.S.A. 79-201b Fourth is the statute specifically addressing tax exemptions
for low
income housing facilities. The subject properties in this case were primarily low income housing
facilities, and K.S.A. 79-201b Fourth is the statute that is applicable here. Because
the appellants
have not met the requirements of K.S.A. 79-201b Fourth, their request for a tax
exemption was
properly denied.

II. Does Article 11, §1(b)(2) of the Kansas Constitution provide an alternative
basis for an
exemption of the subject properties?

The appellants also contend that BOTA misinterpreted or misapplied the
law when it
determined that Article 11, §1(b) of the Kansas Constitution did not provide an alternative
basis
for an exemption for the subject properties. Article 11, §1(b)(2) exempts
"[a]ll property used
exclusively for state, county, municipal, literary, educational, scientific, religious,
benevolent and
charitable purposes . . . ." (Emphasis added.)

The appellants focus on the "charitable purposes" portion of Article 11, §1(b)(2).
The
"charitable purposes" exemption under Article 11, §1(b)(2) is apparently self-executing
because it
is granted by the constitutional provision itself as opposed to empowering the legislature to enact
legislation in the subject area. See Colorado Interstate Gas Co. v. Board of Morton County
Comm'rs, 247 Kan. 654, 659, 802 P.2d 584 (1990).

"'The rule is that a self-executing provision of the constitution does not necessarily
exhaust legislative power on the subject, but any legislation must be in harmony with the
constitution and further the exercise of constitutional right to make it more available. Thus, even
in the case of a constitutional provision which is self-executing, the legislature may enact
legislation to facilitate the exercise of the powers directly granted by the constitution; legislation
may be enacted to facilitate the operation of such a provision, prescribe a practice to be used for
its enforcement, provide a convenient remedy for the protection of the rights secured or the
determination thereof, or place reasonable safeguards around the exercise of the right. . . .'

"'It is clear that legislation which would defeat or even restrict a self executing
mandate
of the constitution is beyond the power of the legislature." 247 Kan. at 659.

The appellants argue that because Article 11, §1(b) of the Kansas Constitution is
self-executing, an exemption from ad valorem taxation can be granted within the provisions of the
constitution without resorting to any statutory exemption. The appellants are correct. A property
can be exempted from taxation if it comes within the self-executing exemption provision of
Article 11, §1(b)(2) of the Kansas Constitution or within a statutory exemption. See
Buchele,
Justifying Real Property Tax Exemptions in Kansas, 27 Washburn L.J. 252, 255
(Winter 1988)
("[F]or any property to be exempt from taxation in Kansas, it must come within the provisions of
the constitution or a property tax exemption statute.").

The appellants argue that their services of providing shelter and other services for the poor
fit within the "used exclusively for . . . charitable purposes" portion of Article 11, §1(b)(2).
In
order to be entitled to an exemption under this constitutional provision, the appellants have the
burden to prove that their properties are used exclusively for charitable purposes. See
Lutheran
Home, Inc. v. Board of County Commissioners, 211 Kan. 270, 275, 505 P.2d 1118 (1973).

The phrase "used exclusively" under Article 11, §1(b)(2) of the Kansas Constitution
was
intended by the framers to mean that "the use made of property sought to be exempt from
taxation, must be only, solely, and purely for the purposes stated in the Constitution, and without
admission to participation in any other use. [Citation omitted.]" Lutheran Home, 211
Kan. at 275-76. "The question is not whether the property is used partly or even largely for the
purposes
stated in the exemption provisions, but whether it is used exclusively for those purposes.
[Citations omitted.]" 211 Kan. at 275.

Our Supreme Court in Lutheran Home adopted a strict two-element definition
of "charity"
or "charitable purposes," as required by Article 11, § 1(b)(2) and K.S.A. 79-201. 211 Kan.
at
277-78. K.S.A. 2007 Supp. 79-201 Second follows the language of the constitutional
charitable
purposes exemption by exempting "[a]ll real property, and all tangible personal property, actually
and regularly used exclusively for literary, educational, scientific, religious, benevolent or
charitable purposes . . . ." Under the first part of the definition for "charity" adopted in
Lutheran
Home, the services must be provided "free of charge, or, at least, so nearly free of charge
as to
make the charges nominal or negligible." 211 Kan. at 278. Second, the services must be rendered
to "those who are unable to provide themselves with what the institution provides for them, that
is, they are legitimate subjects of charity." 211 Kan. at 278.

Here, in determining that the subject properties were not used exclusively for a charitable
purpose, BOTA (as to IFDC) stated:

"The Board finds that the subject property is not used exclusively for an exempt purpose.
The
subject property is used for residential purposes, for which the applicant receives compensation,
either from the tenants of the property and/or federal government in the manner of subsidized
rents. For these reasons, the Board finds that the subject property is not 'used exclusively' and the
request for exemption pursuant to Article 11, Section 1(b) of the Kansas Constitution is denied."

BOTA's decision is in accord with how our Supreme Court in Lutheran Home
defined
"charity" and "charitable" for purposes of the constitutional exemption. The evidence in the record
establishes that the appellants were not making a free gift of housing to the tenants. Rather, the
appellants required each resident in the subject properties to pay an established rent amount. The
residents paid the rent amount either from personal funds or with Section 8 low income vouchers.
The Section 8 vouchers entitled the appellants to receive federal funds as reimbursement for the
residents' housing expenses. If the residents were unable to pay the required rent amount, they
were not allowed to stay at the property. Instead, they were transferred to a homeless shelter or
referred to an appropriate agency for help with housing. As a result, the appellants have failed to
meet the requirement that the services provided were "free of charge" or so "nearly free of charge
as to make the charges nominal or negligible." Lutheran Home, 211 Kan. at 278.
Because the
appellants do not fit within the definition of "charitable" as adopted in Lutheran
Home, they have
not met their burden to show they are entitled to a tax exemption under Article 11, §1(b)(2)
of the
Kansas Constitution.

Nevertheless, the appellants point out that K.S.A. 79-201 Second, the
statutory charitable
purposes exemption, allows reimbursement for services based on the actual expense of using the
property for a charitable purpose. Specifically, under K.S.A. 79-201 Second (a) and
(b), an
agency or organization seeking an exemption for exclusive use for literary, educational, scientific,
religious, benevolent or charitable purposes shall not be disqualified from the exemption because
the agency or organization is reimbursed for such services based upon the recipient's ability to pay
or is reimbursed for the actual cost of providing such services.

K.S.A. 79-201 Second (a) and (b), which were originally enacted by the
legislature in
1986, broadened the scope of the statutory "charitable purposes" exemption. Nevertheless, the
constitutional "charitable purposes" exemption has remained intact. Our Supreme Court has held
that the legislature has the authority to enact legislation exempting property other than that named
in the Kansas Constitution from taxation. The only requirement is that the statutory exemption
must have a public purpose and be designed to promote the public welfare. In re Tax
Protest of
Strayer, 239 Kan. 136, 141, 716 P.2d 588 (1986); see also In re Tax Application of
Lietz Constr.
Co., 273 Kan. 890, 903, 47 P.3d 1275 (2002) ("[T]he legislature has the general power to
confer
additional tax exemptions, or exemptions broader in scope through the enactment of legislation,
unless constitutionally prohibited from doing so."). The effect of K.S.A. 79-201 Second
(a) and
(b) was to confer additional tax exemptions on properties not covered by the constitutional
exemption. These provisions, however, do not change the "charitable purposes" exemption under
the Kansas Constitution and how this exemption has been construed by our Supreme Court.

Our Supreme Court in Lutheran Home clearly defined how an organization
claiming a tax
exemption would fit within the charitable purposes requirement of Article 11, §1(b)(2) of
the
Kansas Constitution. This court is duty bound to follow Kansas Supreme Court precedent, absent
some indication the court is departing from its previous position. Noone v. Chalet of
Wichita, 32
Kan. App. 2d 1230, 1236, 96 P.3d 674, rev. denied 278 Kan. 846 (2004). Because
there appears
to be no indication that our Supreme Court has backed away from its holding in Lutheran
Home,
we determine that the appellants do not fit within the charitable purposes exemption of the Kansas
Constitution.

Importantly, the appellants did not request an exemption under K.S.A. 79-201
Second
when they filed their applications for exemption or when they made their arguments to BOTA. As
a result, BOTA was never given an opportunity to address the issue of whether an exemption
should be granted under K.S.A. 79-201 Second. Moreover, the appellants do not
argue on appeal
that they are entitled to an exemption under K.S.A. 79-201 Second. As a result, any
issue as to
whether the appellants would qualify for a tax exemption under K.S.A. 79-201
Second is not
properly before this court.

Further, even if the issue of whether the subject properties fit within K.S.A. 79-201
Second was properly before this court, the issue would fail. As discussed previously,
K.S.A. 79-201b Fourth is the statute specifically pertaining to tax exemptions for low
income housing
complexes. K.S.A. 79-201 Second is a more general statute that deals with property
used for
literary, educational, scientific, religious, benevolent, or charitable purposes. The subject
properties in this case are primarily low income housing complexes, and K.S.A. 79-201
Fourth
would control here. Accordingly, any argument that an exemption should be granted under
K.S.A. 79-201 Second lacks merit.

While the record indicates that the appellants have established an important service of
providing residential low income housing and incidental services to those in need, the legislature
has not yet enacted an exemption that would cover the appellants' property. The plain meaning of
K.S.A. 79-201 Fourth requires that a taxpayer meet the requirements outlined in the
statute in
order to obtain a tax exemption for low income housing. When a statute is plain and
unambiguous, we must give effect to the intention of the legislature as expressed, rather than
determine what the law should or should not be. Winnebago Tribe of Nebraska v.
Kline, 283
Kan. 64, 77, 150 P.3d 892 (2007). Moreover, under our standard of review, tax exemptions must
be interpreted strictly in favor of imposing the tax and against allowing the exemption for a party
that does not clearly qualify. In re Tax Appeal of Western Resources, Inc., 281 Kan.
572, 575,
132 P.3d 950 (2006). Because the appellants have not met the requirements under K.S.A.
79-201b Fourth, they are not entitled to a tax exemption for their low income housing
properties.
Until the legislature amends the statutes to include the new federal financing options for low
income housing or otherwise expands the exemptions for low income housing, the tax exemptions
requested by the appellants cannot be granted. Based on the plain language of K.S.A. 79-201
Fourth and the strict construction given to exemption statutes, BOTA was correct in
denying the
appellants an exemption on the subject properties.

III. Did BOTA base its decision on determinations of fact not supported by the
record?

Next, the appellants contend that BOTA's decision denying the requested
exemptions
should be reversed because BOTA's determinations of fact were not supported by the evidence.
The appellants focus on the following finding in the Inter-Faith Villa case: "The Board finds that
while the applicant provides services, such as a medical clinic and meals program, the services
being provided are not being conducted from the subject property, but are being provided from
the neighboring properties owned by the applicant." The appellants maintain that Inter-Faith Villa
provided substantial evidence that supportive services were provided at the subject properties.

Nevertheless, BOTA's finding was not in error. While there is evidence in the record that
Inter-Faith Villa provided case management and other supportive services to its residents, the
record shows that other services were offered off-site. For example, a case manager would help a
resident obtain a job helping mow lawns or serving food at the Inter-Faith community center,
which was across the street from Villa Central. Moreover, the residents had access to a health
clinic that was located near the properties but was part of a separate federally funded program. In
addition, Inter-Faith Ministries (IFM), which was located across the street from Villa Central,
could provide after-school activities for children living in the subject properties. As a result, there
is evidence in the record to support BOTA's finding that services were provided from neighboring
properties.

In its order denying IFDC's petition for reconsideration, BOTA recognized that case
management and supportive services were provided at the subject property. Nevertheless, as
discussed previously, the record establishes that supportive services were collateral to the
predominant use of the subject properties as low income housing. This was evidenced by the fact
that the appellants would not allow the residents to remain at the properties when they were
unable to pay rent. Instead, the residents would be transferred to a homeless shelter or referred to
another agency for help with housing. Because the subject properties were predominantly low
income housing complexes, K.S.A. 79-201b Fourth was the statute applicable to this
case.

IV. Was BOTA's decision unreasonable, arbitrary, or capricious?

Finally, the appellants argue that BOTA's reliance on K.S.A. 79-201b
Fourth as the only
possible basis for exemptions for both properties is otherwise unreasonable, arbitrary, or
capricious. The appellants contend that the decision was arbitrary because it earlier granted an
exemption for temporary housing under K.S.A. 79-201 Ninth but refused to grant the
appellants
an exemption for permanent housing under the same statute. In addition, the appellants argue that
BOTA's focus on the financing requirement of K.S.A. 79-201b Fourth is difficult to
reconcile
with the decisions in In re Tax Exemption Application of Mercy Health System of Kansas,
Inc.,
29 Kan. App. 2d 375, 26 P.3d 78 (2001), and In re Tax Appeal of Univ. of Kan. School of
Medicine, 266 Kan. 737, 973 P.2d 176 (1999).

Nevertheless, it is unclear from the appellants' brief what was included in the temporary
housing property for which BOTA previously granted an exemption under K.S.A. 79-201
Ninth.
If this exemption was granted for IFM's homeless shelter, then that property is distinguishable
from the low income housing complexes in this case. Generally, a homeless shelter provides
shelter, food, and other necessary items of survival on a temporary basis free of charge. It is not
low income housing. Residents are not required to pay a set amount of rent. On the other hand,
the subject properties in this case were low income housing complexes for which residents were
required to pay rent. If the residents were unable to pay rent, they were not allowed to stay at the
properties. K.S.A. 79-201b Fourth is applicable to this case. Nevertheless, this statute
might not
be applicable to one of IFM's other properties.

Furthermore, the decisions in Mercy Health System and University of
Kansas School of
Medicine stand in stark contrast to the decision in this case because the properties in those
cases
were not low income housing complexes. In Mercy Health System, the subject
property was a
free-standing rehabilitation center where physical rehabilitation services were provided. In
University of Kansas School of Medicine, the subject property was a primary care
clinic that
provided medical care to low income and medically underserved individuals. Because those cases
did not involve low income housing complexes, K.S.A. 79-201b Fourth (and its
requirements)
would have been inapplicable.

The appellants in this case have not shown that BOTA's decision was otherwise
unreasonable, arbitrary, or capricious. As discussed previously, BOTA's decision is supported by
Supreme Court precedent and this court's decision in Johnson as applied to the facts
of this case.
As a result, the appellants' argument on this issue fails.